Sanofi Investors Count Cost of Praluent Ruling -- Update

By Denise Roland 

A ruling by a U.S. judge blocking the sale of Sanofi SA's new cholesterol-lowering drug dealt a fresh blow to the French pharmaceuticals giant as it scrambles to make up for falling sales of a separate, best-selling medicine.

Sanofi shares ended down more than 2% Friday afternoon, a day after the U.S. District Court of Delaware issued an injunction against the sale of the drug. The judge ruled Sanofi and partner Regeneron Pharmaceuticals Inc. infringed on a patent held by rival Amgen Inc. for its own, new cholesterol drug.

Regeneron shares were down more sharply, 7% lower in midday trading Friday. Amgen shares were up more than 3%.

Sanofi and Regeneron have said they would appeal the ruling, allowing them to continue selling the drug, called Praluent, for now. The appeal process can take anywhere from a few months to more than a year, giving Sanofi some breathing room.

The two can also settle with Amgen, a move the judge in the case encouraged in her ruling Thursday. Such a settlement often involves agreeing to pay royalties. That could lessen the sting for Sanofi. Still, the legal setback remains a big disappointment for one of its most promising new drugs.

Both Praluent and Amgen's Repatha belong to a new class of cholesterol-lowering medicines known as PCSK9s. They were approved within weeks of each other in 2015.

Sanofi has been leaning heavily on Praluent and a clutch of other recently launched drugs to offset a sharp decline in sales from its best-selling insulin medication Lantus. U.S. pharmacy-benefit managers, who negotiate drug prices on behalf of health insurers and employers, have succeeded in winning steep discounts from Sanofi on Lantus. Meanwhile, a biosimilar version of Lantus made by Eli Lilly and Co. and poised to launch in the U.S. this year is expected to cut into sales. Biosimilars are close, but not exact, copies of drugs manufactured using living cells.

Before the ruling, analysts expected Praluent could eventually generate around $3 billion a year globally for the two drugmakers. Praluent's U.S. sales alone were forecast to hit $2 billion or higher by 2020.

Karen Linehan, Sanofi's general counsel, said the company believed Amgen's patent claims are invalid, and that ending the sale of Praluent in the U.S. would go against the best interest of patients.

Amgen said it was pleased with the decision and will strive to make a "smooth transition" for patients who choose to switch to its drug.

The stakes are also high for Regeneron, for which Praluent was considered a potentially large source of growth. Still, the company's top-selling product, the eye drug Eylea, accounts for nearly all revenue, and Regeneron is counting even more heavily on an eczema drug, Dupixent, awaiting approval in the U.S. than on Praluent.

"The company is looking forward to a very important year with multiple drug launches, most importantly Dupixent," a Regeneron spokeswoman said.

Its legal woes aside, Praluent hasn't lived up to its initial promise. Both it and Repatha have struggled to gain momentum in the U.S. market, in part because the PCSK9s have yet to prove that they are more effective at reducing the risk of heart attack, stroke and other serious cardiovascular problems than the much less costly statins.

Sanofi is running a large clinical trial that it hopes will show Praluent significantly lowers cardiovascular risk compared with statins, a move aimed at driving higher demand for the drug.

Write to Denise Roland at [e-mail]

(END) Dow Jones Newswires

January 06, 2017 14:14 ET (19:14 GMT)

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